THE HON JIM CHALMERS MP
TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
ABC AM
TUESDAY, 7 JUNE 2022
SUBJECTS: Housing; Interest Rates; Cost Of Living Pressures; Gas Prices.
SABRA LANE, HOST: Good morning, and welcome to AM.
JIM CHALMERS, TREASURER: Good morning, Sabra.
LANE: Economists are expecting a big rate hike today. What is your advice to families who are struggling with costs right now?
CHALMERS: I think a lot of families should be bracing for an interest rate rise that the market universally expects today and that the Reserve Bank Governor has flagged when he started raising rates before the last election. We obviously don’t pre‑empt decisions of the Reserve Bank board, but that is the strong expectation today. So, for a lot of people, it’s going to be a difficult day. They’re already confronting a skyrocketing cost of living in the form of high energy prices. We just heard about rent and housing prices, groceries as well, and so higher interest rate rises as well, unfortunately, are about to be part of the pain as well.
LANE: The rental market, as you just heard, is really tight everywhere. In Hobart, it is 0.6 per cent. We’ve had snow overnight. People are camping by the Southern Outlet. That’s the main road out of Hobart. Some are camped out outside of churches because they actually have nowhere to go. This is all without normal migration resuming here. What can governments do to fix this?
CHALMERS: Well, I think it is really important that we can get more affordable and social housing into the system for people who are most vulnerable to this housing shortage. We are aware that Tasmania in lots of ways is the pointy end of this challenge. That’s why we’ve got the Housing Australia Future Fund. We do want to build more stock. I think when it comes to housing affordability in the rental market, I thought your story finished with a really important point, which is for landlords who are facing higher interest rates, it would be good to see some loyalty and some understanding when it comes to jacking up people’s rent. Everybody’s doing it tough at the moment. We are all in this together. This is, in many ways, a full‑blown cost‑of‑living crisis that we’ve inherited from our predecessors, and so we all need to work together to do what we can to alleviate some of this pressure.
LANE: The halving of the fuel excise seems to have been totally absorbed right now. Energy prices are skyrocketing, businesses are struggling with that as well as vulnerable households. Is there anything else the Federal Government can do to ease those pressures?
CHALMERS: Well, there is, Sabra, and we should be thinking about it in the near term and then in the longer term as well. In the near term, when it comes to these spiking energy prices, my colleague Chris Bowen is meeting with the State and Territory Energy Ministers tomorrow because a lot of these levers are at the State and Territory level, but at the national level, the regulators have taken some important steps when it comes to price caps and guarantees in the gas market. I’ve asked the ACCC to step up their monitoring of pricing in these markets to make sure that there’s not any dodgy behaviour going on and, if there is, to suggest any regulatory changes that we can make based on the evidence that they collect. So, there is a range of near-term measures like that that we should be contemplating, and we are contemplating.
But I want to be up‑front with your listeners, Sabra. If this was easily fixed it would have been fixed by now. A lot of these pressures in our energy markets have been building over almost a decade now of energy policy chaos, and in the medium term the only way to address them is to get more cleaner and cheaper energy into the system, to get more certainty around energy policy so that we can get that investment flowing and make the system more resilient. The absence of that for the best part of the decade is one of the reasons, not every reason, but one of the reasons why we find ourselves in this position.
LANE: Just on that letter that you have written to the consumer watchdog, some analysts are very curious as to why so many coal-fired generators have been offline during April, May and June. Does that worry you too? Is it possible that there’s been a misuse of market power here?
CHALMERS: Well, it’s concerning to us that a lot of those assets are offline. It’s a combination of planned outages for things like maintenance but also some unplanned ones as well. So, that will be one of the things that the ACCC looks at, because we have got this perfect storm, unfortunately, whether it’s generators offline, whether it’s issues in supply because some of the coal mines have been flooded, whether it’s international factors like the war in Ukraine – all of these issues are coming together at once and creating this extreme price pressure that businesses and households are having to confront. But sitting over the top of that, once again, some of those pressures are near term, some of them are unavoidable. But what hasn’t been unavoidable or what has been avoidable is a decade of chaos in energy policy, which is one of the reasons why we’re in this position. So, what we need to do in addition to those near-term measures is to get that decent long-term energy policy in the system and that’s what we intend to do.
LANE: Your child care policy is not due to start until July next year. Is it an option to bring that forward to the start of 2023?
CHALMERS: Well, what we said when we announced our policy was that, ideally, you’d bring that support in as soon as you can, but it would be hard to imagine being able to do that before that current start date of the middle of next year. There are some implementation issues, of course, but there are also pressures on the Budget. We’ve inherited the budget with more than a trillion dollars in Liberal debt, unfortunately, so we need to weigh up all of our priorities, which we will do. I’ll hand down a budget in October. A key part of that will be a cost‑of‑living package that includes childcare, medicine prices, a plan to get real wages growing again and to start to implement our Powering Australia Plan for cleaner and cheaper energy. That will be an important part of the October Budget. We’ll get that relief into the system as soon as possible because we do understand that in addition to the near-term measures that were in the last Budget to give people a little bit of relief, we need that long-term, sustainable, responsible relief in there as well, and that’s what we’ll do.
LANE: Federal Treasurer Jim Chalmers, thanks for joining us.
ENDS
